What Media Companies Can Learn From The Gap

Retailer Shows Media How to Grow its Audience Online While Decreasing Its Dependence on Google

For the past three years, Gap Inc.'s online commerce has been thriving despite a deep worldwide recession. According to its latest SEC 10K filing, Gap Inc.'s overall net sales fell 10% in this period, but its online store sales grew 33% and Gap.com and OldNavy.com grew 5% and 10% respectively. How'd they do it? Well, a superb web site that leverages multiple brands is a start, and media companies should take notice.

In mid April of 2008, Gap's e-commerce store changed its small font, simple linking header to an eye-catching, bold tab-shaped design. This change has enabled customers to navigate between brands with ease. Before-after analysis with data gathered in Hitwise showed Gap.com's downstream traffic pattern changed drastically in the two-month span between April and May of 2008. Prior to the change, only 25% of Gap.com's downstream traffic went to company's other brands (OldNavy.com, BananaRepublic.com and Piperlime.com). That percentage increased to 55% by the end of Aug. 2008.

The same analysis also showed that Gap.com's referral traffic from OldNavy.com, its sister brand was only 12% with little or no traffic from the other brands prior to its redesign. The same traffic from OldNavy.com jumped to 26%. Piperlime.com and BananaRepublic.com also became major sources of referral traffic for Gap.com. In the meantime, Google.com as a Gap.com referral traffic source was down from 10.1% to 8.6% while its downstream traffic to Google.com was also down from 6% to 3%. Gap.com's reliance on Google decreased reduced substantially. This means customers no longer use a "vehicle" to get to the Gap's online store. In short, Gap's smart design not only increased its sales, it also eased the burden on marketing staff's acquisition and retention efforts because its number of visitors and the time those visitors spend have substantially increased since then.

Wall Street Journal Digital Network is taking a similar approach. Before AllthingsD.com, one of the network's vertical sites, synchronized its site header with WSJ.com in August 2008, only 5% of its downstream traffic went to WSJ.com. A Before-after analysis showed that right after the site header synchronization, there was a dramatic increase in its downstream traffic to WSJ.com -- 35%. The interpretation of this success is that AllthingsD.com visitors are tempted to click on the WSJ.com.com tab on the top of its site -- just for the sake of wanting to see what's going on at WSJ.com. More often than not, the convenience factors and the "a-ha" moments that delight users are the reasons behind a successful site.

Online media publishers have a lot to learn from Gap Inc. One major challenge online media publishers are facing today is finding ways to leverage their individual brand power and optimize the entire portfolio at the same time. Many executives and producers believe not every brand is created equal. Each has its own appeal to a specific customer base. For that reason, some have been employing a search engine friendly, SEO/SEM heavy "verticalization" strategy to extent its reach. There is nothing wrong with leveraging the power of search engines, but this strategy will only work if the Gap-like cross linking implementation is in place. Short of that, it can lead to brand isolation.

Some may argue that Gap's online success has everything to do with being an e-commerce store. But from an analytic perspective, it is clear that every click is purpose-driven and consumers only reward those who understand their behavior, whether you are a commerce site, or a media-content site.

ABOUT THE AUTHOR

Zuobin He "Peter" is former director of digital media research at MTV Networks Consumer Insights & Research Group. Prior to his work at MTV, he managed online merchandising campaigns at Audible.com and spent five-plus years in digital publishing at McGraw-Hill's Professional Publishing Group. He can be reached at hezuobin@gmail.com.